A Direct Update to LTNC Shareholders

Kultura Brands is publishing this update to address questions raised by shareholders regarding the company’s strategy, operating structure, portfolio relationships, distribution, financial reporting, capital structure and current priorities.

Our objective is to provide as much clarity as responsibly possible. Certain matters cannot be discussed publicly in detail because they involve pending litigation, privileged communications, confidential agreements, creditor negotiations, regulatory processes, corporate actions or commercial discussions that have not been completed.

LTNC is navigating a significant turnaround while simultaneously building the foundation for long-term growth. This has required substantially more time, capital and management attention than originally anticipated. The company continues to address historical financial and corporate matters, creditor obligations, litigation, manufacturing challenges and distribution disruptions while developing new commercial opportunities.

These realities have played a major role in Kultura’s development as a management company. This structure allows Kultura to provide management, sales, marketing, commercialization and strategic services to separately capitalized operating businesses while receiving clearly documented contractual compensation.

It is important to understand that revenue generated by a privately held operating company does not automatically become LTNC revenue. Kultura receives only the economic benefits established through its applicable agreements, and those amounts must be accounted for appropriately.

Rather than schedule a Spaces right now, I think the better approach is to answer them directly and give shareholders something they can read and refer back to.

I also want to be candid about where we are while respecting the things we simply cannot discuss publicly because of pending litigation, confidential agreements, creditor discussions, corporate actions and other matters.

Here is what I am proposing to put out:

A Direct Update to LTNC Shareholders

I have read the questions that have been coming in from shareholders, and I want to address as many of them directly as I responsibly can.

Before getting into the individual questions, I think it is important to explain where we are going and why we are building Kultura the way we are.

When I became Chairman, I knew LTNC needed a significant turnaround. What I did not fully appreciate was how much time, money and management attention would be required simply to work through the issues already sitting in front of the company while simultaneously trying to build something for the future.

That reality has played a major role in the direction we have chosen for Kultura.

LTNC simply does not have the financial capacity today to purchase and fully capitalize every good opportunity that comes to us.

We are spending substantial resources dealing with financial and corporate cleanup, creditor matters and serious pending litigation. Some of these matters began long before I became Chairman and before much of the current leadership became involved.

We currently have at least six attorneys retained across the various legal matters affecting the company. The amount of money, time and management attention being spent on legal fees and resolving these matters is significant.

We would much rather be spending those resources on inventory, sales, marketing, new products, distribution and growth.

Unfortunately, we have to address the company we have while simultaneously building the company we want.

That is one of the primary reasons we are developing Kultura as a management company.

When a good opportunity comes to us, we do not necessarily need LTNC to purchase the entire business and then fund its inventory, manufacturing, employees, working capital and every other operating requirement.

A separately capitalized operating company can maintain its own business, assets, employees, obligations and capital requirements.

Kultura can then provide management, strategy, sales, marketing, commercialization and other services pursuant to a management agreement and receive contractual compensation for doing so.

That gives the public company an opportunity to participate economically without requiring LTNC to finance every operating business itself.

It is important to understand that we cannot simply take the sales of a private company and call them LTNC revenue.

That is not how this works.

Kultura earns whatever economics its agreements entitle it to earn, and those amounts have to be accounted for appropriately.

Our goal is to create real, documented and recurring economics for the public company while allowing operating companies to obtain the capital they need and carry their own operating responsibilities.

Going forward, we want shareholders to be able to answer three questions very easily:

What does Kultura own?

What does Kultura manage?

How does Kultura get paid?

That is the clarity we are working toward.

There has also been a tremendous amount of adversity getting here.

We have had third party relationships that did not develop the way we expected. We have made decisions that, knowing what we know today, we would make differently. We have dealt with delays, manufacturing issues and product quality problems. We have historical financial and accounting matters requiring substantial work.

Our original distribution strategy also took a major hit when RNDC filed bankruptcy.

That forced us to pivot quickly.

We still have NDC in two of our original markets. We maintained our other distributor relationships, added new relationships and continue onboarding additional distributors.

There are more being worked through right now. Some require information from us. Some require contractual obligations to be completed. Some are moving through onboarding.

We are going to stop getting ahead of those processes.

Internally, we also have not always operated with the level of communication and teamwork that I expect.

That needs to improve.

There remains a tremendous amount of work in front of us.

We know that.

And we remain committed to seeing this through.

1. What is the overall direction of Kultura Brands?

We are building Kultura as a management company.

The goal is to build management, sales, distribution, marketing, commercialization and strategic capabilities that can be used across multiple businesses.

This structure allows LTNC to participate in opportunities without requiring the public company to purchase and fully capitalize every operating business.

Our focus now is execution.

We need to continue improving the corporate and financial foundation, address the capital structure, work through the legal and creditor matters, properly document the management relationships and grow the businesses we manage.

2. What is the ownership structure of Scofflaw and how does LTNC benefit?

Scofflaw is a separate privately held company and is not an LTNC subsidiary.

We do not believe an LTNC shareholder update is the appropriate place to publish the ownership percentages of a privately held company.

What matters to LTNC shareholders is Kultura’s contractual economic relationship with Scofflaw.

The structure we are working toward allows Kultura to provide management and other defined services and receive compensation under a management agreement.

Scofflaw maintains its own operating business and responsibilities while Kultura can participate economically through the services it provides.

3. Why are some businesses private rather than owned directly by LTNC?

The biggest reason is capital.

LTNC presently does not have the financial capacity to purchase and fund every opportunity that comes to us.

At the same time, we do not want to simply walk away from attractive opportunities because LTNC cannot write a large acquisition or working capital check.

The management company structure gives us another path.

Private operating businesses can obtain their own capitalization and carry their own operating requirements.

Kultura can contribute management, commercial capabilities, relationships and execution and receive contractual economics for doing so.

That is a much more capital efficient model for where LTNC is today.

It also allows the operating companies to maintain their own assets, liabilities, employees, contracts and financial responsibilities while Kultura’s rights and economics are clearly defined through contract.

The objective is not to commingle businesses.

It is the opposite.

We want everyone to understand exactly what belongs where and exactly what LTNC receives.

4. Who employs the national sales team?

We have assembled an extremely experienced beverage sales organization supporting the businesses we are working with.

Those individuals are not directly employed by LTNC and their compensation is not being billed directly to LTNC today.

Their employment and contracting arrangements currently sit outside the public company.

We are working to make sure the relationships between the relevant businesses and Kultura are properly documented so that it is clear how Kultura benefits from that commercial infrastructure.

We do not believe introducing every private payroll or invoicing entity today would make the structure easier for shareholders to understand.

The important point is that we have built access to a significant commercial organization without requiring LTNC itself to directly carry the entire payroll and expense structure.

5. What happened with RNDC and where does distribution stand?

RNDC was a significant part of our initial strategy, and its bankruptcy materially disrupted those plans.

We had to pivot quickly.

We continue working with NDC in two of the original markets, maintained our other distributor relationships, added new relationships and are onboarding additional distributors.

There are more underway.

Some require information. Some require contractual obligations to be completed. Some are moving through onboarding.

Going forward, we want to focus less on announcing distributor conversations and more on having product in warehouses, salespeople selling it and product actually moving through the market.

That is what matters.

6. When does this begin showing up in LTNC revenue?

The management company structure is important here.

If a separately owned business generates sales, those sales do not automatically become LTNC revenue.

Kultura earns whatever compensation it is contractually entitled to under its management agreement.

Depending upon the specific agreement, that could take different forms.

Our goal is to establish relationships where growth in the managed businesses produces meaningful and recurring economics for Kultura.

The actual accounting treatment will follow the agreements and the appropriate accounting requirements.

7. What are the priorities?

Distribution and execution.

We are working on additional markets, retail doors, convenience, on premise, venues, national accounts and other significant opportunities.

There is a substantial amount happening.

What we want to change is announcing opportunities too early.

A good meeting is not a completed deal.

Interest is not a completed deal.

Starting onboarding is not a completed launch.

We want to increasingly announce things when they are real and executable.

8. How do you decide which opportunities benefit LTNC?

We look at what Kultura contributes and what Kultura receives.

What services are we providing?

What capital are we required to contribute?

What obligations are we assuming?

What compensation does Kultura receive?

How long does the agreement last?

What protections does Kultura have?

What happens if the business grows substantially?

And does the arrangement ultimately make economic sense for LTNC?

The public company does not necessarily have to own an entire business to benefit from helping that business grow.

9. How are related party relationships handled?

They need to be handled carefully and properly documented.

There may be situations where individuals associated with Kultura also have interests in private companies that work with Kultura.

Those relationships require appropriate corporate and legal review.

Most importantly, any agreement needs to make economic sense for Kultura independently of who owns the other company.

We are putting substantially more emphasis on getting those relationships properly documented and making the economics clear.

10. What is the plan for the share structure and dilution?

Everyone involved understands that the existing LTNC capital structure needs to be addressed.

It is being actively worked on.

There are corporate processes underway that we are not able to detail or announce before the appropriate steps are complete.

We are not going to announce a ratio or effective date prematurely.

When we are in a position to provide definitive information, we will.

11. What is happening with the historical financials?

There is substantial work underway.

Historical financial and accounting information requires review, reconciliation and correction.

Corporate records, capitalization information, historical transactions, contracts and other areas also require significant work.

We do not want to announce an accounting conclusion before the appropriate professionals finish that work.

We have made progress.

There is still considerable work remaining.

We would rather say that plainly than tell shareholders everything is finished when it isn’t.

12. What about debt and creditor matters?

There are significant obligations and creditor matters affecting LTNC.

They have consumed an enormous amount of management, legal and professional attention and have reduced the capital available to invest directly into growth.

We are actively working through them.

We cannot publicly discuss confidential negotiations, legal strategy or individual creditor matters in detail.

The objective is to get the company into a position where substantially more of our time, capital and attention can be directed toward building the business rather than dealing with matters that have been sitting with the company for years.

13. Can shareholders expect better communication?

Yes.

We need to communicate more consistently and we need to communicate more carefully.

One thing we need to stop doing is confusing an opportunity with an accomplishment.

A conversation is an opportunity.

Execution is an accomplishment.

We want our communications increasingly focused on things that have actually happened.

14. What should Kultura look like 12 months from now?

If we execute successfully, we want shareholders to see a significantly cleaner company with better reporting, a healthier capital structure, multiple meaningful businesses under management, properly documented management agreements, a strong commercial organization and expanding distribution.

Most importantly, we want the company to become much easier to understand.

What do we own?

What do we manage?

How do we make money?

Those questions should have simple answers.

Those are objectives, not financial guidance.

15. What is causing the ticker and name change delay?

The process involves multiple corporate, regulatory and market related steps, and not every part is controlled by us.

We continue working through it.

We know shareholders are frustrated.

We are frustrated too.

We do not want to provide another projected date for something where another party can ultimately affect the timing.

When there is a definitive development, we will communicate it.

16. What is the status of 15c2-11?

A tremendous amount of work has gone into this process.

We have made significant progress and are working through the remaining actions involving the parties required to complete it.

There are details we would love to provide because they would show shareholders just how far along this process has come.

Until everything required is completed and confirmed, however, we are not going to call it finished.

Nobody wants this completed more than we do.

17. What is the relationship between LTNC, Scofflaw, and Khalifa?

These should not all be interpreted as LTNC subsidiaries.

There are separate privately held companies and brands involved.

Kultura’s strategy is primarily to establish management relationships with those businesses.

The private operating business maintains its own ownership and operations.

Kultura provides services and earns whatever compensation is provided by the applicable management agreement.

That gives LTNC the ability to participate economically without requiring LTNC to acquire and fund the entire operating business.

18. What is the rollout schedule?

Additional distribution and markets are actively being worked on.

There are distributors and markets at various stages today.

There is paperwork, onboarding, inventory, retailer acceptance, placement and ultimately sell through involved in actually launching a market.

We are going to announce expansion based on commercial readiness rather than putting out speculative timelines.

19. What is happening with Thirst Responder and Cencora?

Thirst Responder is being handled differently from many of the private company management relationships discussed above.

There is work underway regarding its structure and commercialization.

Until everything is documented, we do not want to inaccurately characterize its final ownership or economics.

Regarding Cencora or any other potential commercial relationship, we are not going to publicly discuss confidential negotiations before something is definitive.

20. What is next for Lock’dIn?

Lock’dIn is also being treated differently from the basic management company model.

We continue working through the appropriate structure, capitalization, positioning and commercial strategy.

When that work reaches a point where we have a meaningful plan to communicate, shareholders will receive an update.

21. What is happening with UFC, Zuffa and the other sports and entertainment opportunities?

We are working on significant opportunities involving sports, entertainment, venues and strategic partnerships.

These can involve substantial contractual obligations, confidential financial terms and multiple parties.

We are not going to negotiate those arrangements publicly.

A discussion is not a completed agreement.

A proposal is not a completed agreement.

A contract under negotiation is not a completed agreement.

When something is final and appropriate to announce, we will announce it.

22. Is there going to be a reverse split?

We understand that the existing LTNC share structure needs to be addressed.

Management and the Board have been actively working on it.

There are corporate and market related processes involved that we cannot discuss in detail today.

We are not going to announce a ratio, effective date or outcome before we are in a position to do so properly.

Shareholders should understand that this is actively being addressed.

23. What is the status of the lawsuits?

These are serious matters and they are consuming significant resources.

Some of the litigation affecting LTNC was underway long before I became Chairman and before much of the current leadership became involved.

We currently have at least six attorneys retained across various matters involving the company.

The time and money involved is substantial.

We would much rather be putting those resources into building the business.

Unfortunately, these matters have to be addressed.

We are not going to publicly discuss litigation strategy, settlement negotiations, privileged communications or predictions regarding outcomes.

Our attorneys need to be allowed to do their jobs.

24. Why is OTC Markets showing 100 billion authorized shares when the transfer agent reflects 50 billion?

We are aware of the issue and are actively working to get it corrected.

The transfer agent reflects 50 billion authorized shares.

The confusion is centered around shares that have been set aside as reserves in connection with certain existing obligations, including reserves that may provide flexibility if needed to help address substantial legal and professional expenses associated with matters the company is dealing with.

Those reserved shares should not be confused with an additional 50 billion authorized shares.

They are reserves maintained through the transfer agent within the company’s existing structure.

We understand why seeing 100 billion publicly has created confusion.

We are working with the appropriate parties to rectify the discrepancy and have the public information updated so it accurately reflects the company’s records.

The transfer agent information we are relying upon reflects 50 billion authorized shares.

25. What is Nakatomi Beverages and how does it relate to LTNC?

Nakatomi Beverages is a separate privately held operating company. It is not an LTNC subsidiary.

It is involved in certain beverage opportunities within the broader group of businesses we work with.

Consistent with the management company strategy, Kultura does not need to own Nakatomi in order to have an economic relationship with it.

Any economics belonging to Kultura need to arise through properly documented contractual arrangements.

Common management involvement should not be confused with common ownership.

And the revenue of a privately held company should not automatically be confused with LTNC revenue.

That is one of the distinctions we intend to make much clearer going forward.

Closing

We know this is a lot of information.

The truth is that there is a tremendous amount going on.

This turnaround has required substantially more time, money and energy than anticipated.

There are serious lawsuits.

There are creditor matters.

There are financial and accounting issues.

There are corporate records requiring work.

There is a difficult capital structure.

We lost a major component of our original distribution plan and had to rebuild around it.

We have dealt with manufacturing problems, product quality issues and delays.

We have made mistakes.

And we have not always worked together internally the way a Board and management team should.

We are not going to pretend otherwise.

What is probably most frustrating is thinking about how much money, time and energy has gone toward attorneys, legal matters and resolving problems instead of going directly into building the business.

But complaining about that does not solve anything.

We have to deal with what is in front of us.

At the same time, we have to keep building.

That is why the management company strategy matters so much.

LTNC cannot presently write a multimillion dollar check every time a great opportunity comes through the door.

But we can bring management.

We can bring sales capabilities.

We can bring relationships.

We can bring strategy.

We can bring commercialization.

We can help build businesses.

And if we structure those relationships correctly, Kultura can earn meaningful contractual economics for doing so without requiring LTNC to own and finance every operating company.

There is still an enormous amount of work ahead.

The agreements have to be right.

The accounting has to be right.

The corporate structure has to be right.

The financial reporting has to improve.

The Board and management have to work together.

And ultimately, none of the words in this update matter if we do not execute.

I remain fully committed as Chairman.

We are not walking away because this turnaround became harder than expected.

We have a lot left to prove.

The only way we are going to prove it is through results.

Thank you to the shareholders who have stayed engaged, supported the company, purchased the products, asked difficult questions and continued to hold us accountable.

We hear you.

We understand what is in front of us.

And we are doing the work.